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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Robert Rose who wrote (32327)	11/5/1999 7:42:00 AM
From: j.o.	Respond to of 99985

Here's what the Market Doc is saying...(eat your heart out, Abby <gggg>) Indextrade.com Markets @ a Glance [Archive] November 5, 1999 Yesterday's story centered around restrictive monetary policy from across the Atlantic, as the UK and ECB both hiked rates. The idea of the global economic cycle making it's way westward from the US to the European continent has definitely gained some credibility. What we've also seen by this joint hike interest rates is the coordinated international monetary policy issue addressed in this weeks economic roundup. The US has tightened 50 bpts and now the UK and ECB have gone the same, although I still feel the 50 for Euroland was a bit aggressive. This coordinated policy will help preserve stability on the US/Euro and US/UK exchange rate front. A Special Note: The 50 basis point hike by the ECB did however provide a nice relief trade to the German Fixed Income market as Bunds staged a nice rally. There is really not much uncertainty hanging over their market as far as fear of near term continued tightening is concerned. The markets can trade a bit more on an unbiased fashion. The positive reaction in overseas markets may have provided a little support to the US counterparts as Bonds crept higher keeping pressure off Stocks....not that they couldn't handle some anyway. Stocks Tame yet positive day for all the indexes, as the NASDAQ continued its bullish ways while the Dow played some technical games using the 10,650 zone as a pivot point for the first half of the session. I won't try to provide significant near term levels given the potential volatility resulting from Employment data today. OK if I have to....I'll stretch it and mention potential technical support for the Dow at 10,580. No clear direction for this index or S&P at this point. Near term resistance for the NASDAQ....4,000. (I'm gonna kill that joke). I don't have to tell you, market drivers will revolve around Jobs data. Bonds Bonds crept through the 6.12% yield support area as some European positive activity (e.g. Bunds), drifted towards the US. Technical levels for today reside at 6.0% yield support and 6.25% resistance and if things get hairy look for a 5.90% to 6.40% band. It seems that sentiment is shifting for no Fed policy action in the near term. Well keep an eye on Unemployment Data today. I would weight... 1) wage data, 2) the non-farm number and then 3) the outright level (e.g. 4.2%) in that order of significance. Currencies US$/Yen is very tame at this point while the Euro gave back some significant ground against the Greenback over the past couple of weeks. Some political uneasiness with the resignation of France's Finance Minister Strauss-Kahn provided some weakness a few days ago, however, given that the ECB cleared the market on interest uncertainty, the Currency traders have refocused on the potential for the US to tighten. As a result, the Euro declined a big figure yesterday bringing the exchange rate back the 1.03 handle which is well into the long term range of about 1.00 - 1.07. Have a good weekend. Stephan Kudyba (MBA/PhD)..... THE MARKET DOCTOR indextrade.com